 Everything is in three steps, three stages these days, you know, three steps to heaven, actually. And that's the same thing with fiscal policy, three steps to fiscal policy, to fiscal proof, if you will, here on Talking Tax with Tom. And guess what? There's Tom Yamachika on Talking Tax with Tom, talking about Arthur Schopenhauer. My goodness, you know, when this show is over, talk to your better half and ask your better half if your better half knows anything about Arthur Schopenhauer. So Tom, how come you settled on Arthur Schopenhauer? Well, Arthur Schopenhauer is a German philosopher that this is him right here, and he has, you know, given us one of the great quotes about the nature of truth and how it's accepted into our society. And we'll get to it in just a second, but I had, you know, a little poster with Mr. Schopenhauer's quote, and it was, you know, I bought it in Berkeley, which is where I went to law school. And I had it in my dorm room when I was there. It helped remind me of the, you know, the fragility of truth and how it, you know, comes to be accepted. So let me just kind of go over, you know, what his quote was, and then we'll go into how that plays out in our state government today. So Mr. Schopenhauer had a quote about truth going through three steps. So he said that all truth goes through three stages. First, it is ridiculed. And if that isn't bad enough, the second stage is that it is violently opposed. And then after that, it is accepted as self-evident. Wait a minute. Are we talking about state issues here or federal issues? I want to be clear about that. Well, he was talking about all truth. He was talking about all truth. But let me kind of give you an application to hear in Hawaii this, you know, this sucker just happened. Okay. You may remember the Office of Hawaiian Affairs. We have one of its trustees as a host on another think tech show. His name is Kalee Iakina. He got into, and it was elected a trustee of the Office of Hawaiian Affairs a few years ago. And he made it his mission to, you know, find and uncover, you know, fiscal improprieties, which he thought were taking place or had taken place at the office. So he came out with a proposal that the trustees engage a national accounting firm to look for broad waste and abuse. No, there isn't any, come on, Kalee. You know, and then he had. That's the ridicule phase. That's the ridicule phase. So first he had to convince his fellow trustees that there was actually something there to even look at, because it involved the expenditure of a, you know, fairly large amount of money to get this audit study going. But eventually, there was about a half million dollars paid in, I think it was around September 2018, to the accounting firm Clifton Larson Allen, a national accounting firm to conduct a review of OHA's contracts and disbursements. The review found 38 red flag transactions, transactions that looked suspicious. And the Clifton Larson Allen issued a report on it. The report was kind of hard to read. So Mr. Rakina's office, he had some aids kind of, you know, grind through it and come up with a more readable version of these 38 red flag transactions. Okay. Now, what was OHA's reaction? On the day the report was issued, a statement of OHA's chair of the board at that time, Colette Machado, and its chair of the committee on resource management, Dana Huna, said, while this report observed indicators of potential fraud, wasted or abuse, it did not identify actual instances of fraud, waste or abuse. I'm thinking what? But not only did the incumbent trustees, the older trustees, they didn't stop there. They used that as an argument to try to kick Mr. Rakina out. On a PBS Insights candidates forum, they had a Keone Sousa, who was then running against Mr. Rakina. By the way, he got elected this time around and he's a new trustee now. But but Mr. Sousa said, hey, do I think there was a waste of $500,000? Absolutely. Phase three. Now, this is phase two. This is still phase two, the violent opposition. Because the OHA chair, Trustee Machado, she doubled down and said, Kelly, you tried to find the smoking gun and there was none. It's on you now. Despite this opposition, Mr. Keone won his 2020 race and he's still an OHA trustee. Colette Machado is no longer OHA chair. The president of OHA, means its executive director, Mr. Krab. He's no longer there. He was the one who wrote to John Kerry, wasn't he? That's right. No, that was an amazing letter. Seeing Hawaii is a separate country. Yeah, it's kind of, you know, there are some things that kind of make you shudder at the thought. So, after that happened, the legislature was motivated to follow up on this red flag study and they took the OHA trustees at their word. All right. So you got these red flags. Let's find out if there was actual evidence of fraud, wastes, or abuse. They went to a second accounting firm called Plant Moran, also a national firm. And they took a look at these red flag transactions and they found, yeah, there was in fact instances of fraud, wastes, and abuse. You know, not all 32 transactions were so characterized, but a good number of them were. And then we go to the third stage of truth, acceptance as self-evident. OHA chair, Carmen Hululindzi, was quoted as saying at a news conference, we are determined to assure accountability for past wrongdoing. We know we have to do much better to deliver what our beneficiaries need. So, it was right all along. We're supporting it. We've got to clean this up. So that's, those are the three stages of truth when it came to OHA, ridicule, violent opposition, and then acceptance as self-evident. Thank you very much, trusty. Thank you very much, trusty Akina. Yeah, he stuck with it the whole time, didn't he? Good for him. So, we want to thank him for that. And that shows us, at least in that instance, what happened and the stages of truth that that went through. Now, we're seeing these three stages play out in another context and we've had some, the people involved in our show. Before you go to that, I just want to remark that there are relationships between the three phases. The one that comes to mind first is when you say it's self-evident, you're really putting the lie to phase one and two. We were only kidding you before. We were kidding you when we ridiculed you. Sorry about that. And we were kidding you when we doubled down and deposed this violently. And number three is like, oh, you forget stages one and two. They didn't really happen. And the implication is that we just all the time, no big deal, we'll work it out. And there's this tremendous dishonesty in this sequence, right? Well, not necessarily. I mean, this was being made by different people now. So the point of view of the organization and its communications to the public. Oh, yeah, I mean, the organization stayed the same. But the actors in it didn't. And that, I think, is one good part of the process. I mean, when you have to go through these three stages of truth, I think there's a price to be paid. And so we don't want to go through this all the time. If we don't want to go through it enough of the time so that people get to feel some confidence ultimately. And we need to go through it as much of the time as we find there are problems. So if Kaliyakina found that there were other issues beyond the 38 red flags, then he could and should and would raise those flags as well. I would expect him to do that. Oh, yeah, of course. But I think at that point, we're already in the third stage. So it's a little bit more smooth sailing that time. So how was it applied today? As I was about to talk about, we talked in earlier shows about the Department of Land and Natural Resources. You remember, we had a former gentleman, a gentleman who was formerly in the land division of DLNR. And he talked about mismanagement of public lands. He was ridiculed. He's not there anymore. The state auditor came in. How come he's not there anymore? He retired. But people criticized him for it? Of course they did. And then the state auditor came in. And he looked around and found some of the same issues that the gentleman on the inside was talking about. And we had him on the show. And so what happened with that? The House of Representatives formed an investigative committee to follow up on the findings of the audit that were issued for DLNR. And I believe the Agri-Business Development Corporation ADC. But it was kind of more concerning about the auditor. Because in the end, a good third to one-half of the report wasn't about either ADC or the Department of Land and Natural Resources. It was, let's throw out the auditor. That was the violent opposition. That didn't work. It didn't work. The auditor is still there. We're not entirely sure if this violent opposition phase is completely done yet. We still have the same speaker of the House. Is the investigation done? I think the investigation is done. Many of the same people are still... What was the report of the investigation? What was the report of the investigation? Kick out the auditor. That's it? That's the report. Pretty much. They said, well, DLNR had a response for what the accusations were. Sounds reasonable. ADC had a response for what their accusations were. Sounds reasonable. Must have been the auditor going overboard and breaking all legitimate boundaries. Let's get him the hell out of there. Well, do we get to a third phase on that? Hopefully, the third phase will start soon. Since we've gone through the first two already. So hopefully, there are some new and enlightened faces at the legislature in this coming session. We'll be able to see this problem as it is and help clean up DLNR. Well, you spoke about, in the OHA case, you spoke about the evolution of the organization itself. And although new faces one and two might have been involved dishonest people or politically charged people, we have to follow the institution. And so in the third phase in OHA, you have new faces. You mentioned, I think that's an important factor here. That's why it's important to have new faces. That's why it's important to keep changing the officials involved so that the next generation can point out where we are on the three-step continuum. Right. So we're at the phase right now where we've got a new governor. There will probably be a new director of DLNR. There may be other changes within the organization as well. We don't know yet. There are changes within the legislature. We don't know if those are going to affect the outcome of the legislative investigation or if there's going to be another investigation or what other repercussions they're going to be. But there are certainly new faces in the legislature, both in the House and the Senate. The stage is set for step three. But let me ask you this time, what does step three look like? In your mind's eye, how do we know if they're who is saying what happens where you and I can conclude that, oh, good, we're in step three? I think we will be in stage three when somebody either within DLNR or at the legislature says, oh, yes, there were problems there, let's clean them up, or we've cleaned them up. The state auditor wasn't a bad guy after all. That's the outcome that I'm looking for. That's the outcome that I think should happen. Sure. The funny thing is you mentioned a minute ago that it was a disconnect between what was going on in the agribusiness organization and the criticism of the state auditor. I remember that. We had a couple of shows on that. There was a disconnect. If there is a disconnect, then logically, they could find the truth and say it's self-evident about the agribusiness corporation that they could stick on their conclusion that the state auditor was somehow out of bounds. No, it's possible, but I don't think that's what's going to happen. It would be a bad result if that happened. I think so too. The truth that we're talking about here extends both to DLNR and the state auditor. We need the state auditor around. We need a watchdog in there. We need him to bark and bark and bark. Even though there may be some false alarms here and there, it's a natural part of the process. We absolutely need to have him, or we maybe never get to phase three. That's right. We would never get to even phase two sometimes. Any other examples or if not, what are the grand conclusions from these two examples that you've given? I remain cautiously optimistic about the future of our state. It may take some big bumps, violent hurdles, hopefully not an armed insurrection, but there are going to be certainly bumps on the way to get to fiscal health, fiscal responsibility, transparency, all of the things that we think are essential for good government. Let me synthesize some of the things that we've discussed and maybe would be relevant. Number one, the press is an important factor here. The civil beat, the star advertiser, and to some extent think tech. We've got to reveal where the ridicule is inappropriate, where the opposition is inappropriate. What the final realization of self-evident really means in terms of the first two steps. We've got to call a spade a spade when we examine a truth that should have been recognized at the outset. I say we, I mean all the media. It's not just that we slide delicately into phase three. When you get to phase three, you've got to call out phase one and two. You've got to say the ridicule was inappropriate and disingenuous, if you will. And the double down opposition, that was also inappropriate and disingenuous. So the media has got a role here, I think, in calling this out, in order to minimize it going forward. And the second point that comes to me is that it's really important that we get new blood in the legislature as often as possible. Not only in the legislature, in all of our state government organs, I think that's essential. That's why Josh Green ordered point new people wherever he can. Let's clear the air, including DLNR, enough. So yes, I totally agree. It's everywhere in state government and the governor has a fair opportunity to do that, but so do the voters. And we want to see fresh blood, new faces. We want to see, may I say, young people who are idealistic come in there and who are not afraid. Oh, yeah. One of the ingrained features of the state government we now have is, and it's not only here, but it's in a lot of other states. It's a civil service system. So we change people at the top, but the people just below them have been there forever and ever, or could be. So there is, I think, ingrained in the system a resistance to change. And hopefully that won't impede the truth stage process too much. But that is certainly where some of the resistance or the ridicule or the violent opposition can come from. And the third thing that comes to my mind is internal reform, restructuring. For example, the power that the chair in a given committee has in the legislature, that's got to be changed. The power of the conference committees at the end, that's got to be changed. And the whole thing about bait and switch in the bills, those kinds of reforms have to be confirmed and expanded so that it's transparent and there's no room for back room deals and so forth. Because what you're talking about reflects a certain level of corruption. And we have to address that. Yeah, ideally people could understand that from the beginning, but if they don't, and a lot of times they don't, then it has to go through some painful realization stages and reactionary stages before we get to where we need to be. I remember I went through the door for a candidate 20 years ago and I know a number of people would slam the door in my face. Maybe it was because of racial issues, I don't know, but what they would say to me was, I don't vote, I don't care. I'm not involved and I don't want to be involved. Don't talk to me about state government. Don't talk to me about candidates and elections. I said to myself, see that's not productive in a democratic society. And I think there's a lot of people, you know, it's reflected in the turnout, right? A lot of people in this state just don't care. They don't want to be involved, not their business. And so they let it go on year after year, term after term, without even knowing what's going on, much less acting on it. Well, then if you're in that camp, don't complain about high taxes. Don't complain about government corruption. Don't complain about stuff that you can fix at the ballot box. How do we get them engaged? Well, I think by programs like this, I mean, we take the truth out, we show people how the truth has gone through three stages and, you know, let them decide, hey, is this kind of government we want? Is this the kind of government we need? And if not, let's make some changes. You know, I admire your zeal and your first, first picasity, let me say that, Tom, and the tax foundation. But clearly, whether there are enough tax foundations in this state, whether there should be more tax foundations, you know, singing the same song, you know, raising the same issues, I think, you know, frankly, it's a great way to have a valuable career. I think everybody has a duty to learn and speak out, everyone. And I don't think people in the state fully understand that or a lot of them. And I'm not sure that the young people coming into, you know, the workforce and the force by which they might seek election, I don't know if they understand that. So, clearly, are there enough tax foundations? Could there be more? What should they look like? Well, in terms of, like, nonprofits like ours, yeah, we have a few of them with different political, ideological leanings. I mean, there's the grassroot Institute of Hawaii, which Kalei Akinah does head. There's the Apple Seed Center for Law and Economic Justice, which looks at some, you know, some of the same issues. There's the Citadel of the Law Center for that Brian Blackheads, he has, or his organization has been responsible for some of the major transparency victories at the Supreme Court of Hawaii. So, you know, organizations like ours are out there. We're a dying breed. Why do you say that? Oh, I need to know more. Funding levels have dropped. My organization, for example, is down to, you know, one and a half people. Used to be like four or five. Thinking of Lone Kalapa way back when. Oh, yes, of course. And even before him, you know, Fred Benions, the other executive directors that we at the Foundation have had over the years with their units in the Chamber of Commerce. Well, I suggest to you that the same malaise that I described a minute ago is operating on your funders. They know what you stand for. They know what you're doing presumably. But they're not excited about it. They don't want to be involved. It's not important to them. They'll go with the flow. Don't make A. And this is a serious problem because if they don't air even enough to support somebody who does do something about it like the Tax Foundation, then, you know, we're really cooked, aren't we? At the end of the day, if we didn't have a Tax Foundation, if we didn't have a number of these other nonprofits, we would be victimized. I mean, as a society, they pulled out from under us. Absolutely. So we need watch our organizations. Ours is one of them. So I hope that the people who do support us recognize the three stages that we're going through as well. When we did our real lawsuit, for example, that manifested the ridicule and the violent opposition to the 10% skim off the county surcharge. And now it's down to 1%. It's accepted as self-evident. Can't even remember phases one and two. They're gone. Nobody wants to remember them. That's right. Oh, they charge 10%? When? You know, Tom, a lot of this is just to go to Schopenhauer for a minute. It's really a study in truth is what it is. If you come up there and you tell a song and dance story, that something is not wrong, that it's just all fine, and you know better. This is on the national level too. Of course, you see it every day in the newspaper. You're not telling the truth. And when Trump started lying and the estimates are that he lied 30,000 times, did I say 30,000? Yeah, I said 30,000 times documented by the press over the course of his administration. That's pretty serious for a democracy because you've got to have truth. You've got to have people telling the truth. So when you see people going through these three phases, whether it be city, state, or national, and denying the reality, not that far off from denying the election. And this is very troublesome that we have such a ubiquitous question of truth. Well, hopefully people recognize that the Trump lying about the elections was the ridicule. January 6th was a violent opposition. And now people are accepting as self-evident that wrong stuff happened. And we're not going to elect that guy into the White House ever again. You heard it here on Think Tech. That's Tom Yamachika speaking the truth. Just like Schopenhauer. Thank you very much, Tom, for a very interesting discussion. Thank you, Jay, for having me on the show. Thank you so much for watching Think Tech Hawaii. If you like what we do, please like us and click the subscribe button on YouTube and the follow button on Vimeo. You can also follow us on Facebook, Instagram, and LinkedIn, and donate to us at ThinkTechHawaii.com. Mahalo.